Brand-Name Drug Prices Rise Despite Political Pressure

By Joe Mantone

Even as drugmakers become fresh targets for criticism by presidential candidates, the companies have been hiking prices, the WSJ reports.

Wholesale prices for the 50 top-selling brand-name drugs in the U.S. rose by an average of 7.82% in 2007, up from increases of 6.73% and 6.22% in the previous two years, according to data from Delta Marketing Dynamics, a health-care marketing research company. The increases come as the industry is facing a wave a patent expirations and drug pipelines are running dry.

“Companies are under great pressure to deliver revenue, and it’s becoming increasingly difficult to do so as generics displace profitable brands,” William R. Little, president of Delta Marketing says. “I think drug companies, by and large, are in a survival mode.”

The hikes could backfire by giving Washington more ammo for greater government power to negotiate prices, the WSJ says. Having the federal government sit across the table in price talks as part of the Medicare Part D drug benefit, now verboten, has already been a hot topic on the campaign trail.

The companies defended their actions. Glaxo said the average price increases of its drugs in percentage terms were “below the consumer-price index for the years 2005-07.” Sanofi says it “makes every effort to price our products competitively relative to the value that they provide to patients.”

Pfizer took a 16% increase on bestseller Lipitor in the last three years. “Over the past decade, Pfizer has a well-established history of moderate pricing versus competitors in the U.S. market, particularly when you consider that the vast majority of our customers receive some type of legislated or negotiated discount off our announced list prices.”

Comments (4 of 4)

No question certain meds are useful and important to others, and desirable thanks to pharma DTC. What is not explained by the pharma industry is the fact that thier products are very expensive compared with other countries, aside from stating that this is what the U.S. market will bear. I'm sure other organizations would offer a similiar explanation.

Furthermore, considering that the development of many of the branded drugs available are funded by taxpayers via NIH, patients are in effect paying for thier meds twice, which essentially makes the price of branded meds that much more expensive.

12:59 pm February 24, 2008

Doctor Ken wrote :

Want to save millions of dollars in drug marketing costs IMMEDIATELY? Rescind the FDA requirement for drug companies to publish a full page of medical info with each magazine Ad.$$$$ This info is already supplied by pharmacist

4:43 pm February 21, 2008

mrpumpkincat wrote :

I am a diabetic, insulin prices have soared with out any obvious reason. . This non-prescription life drug has not changed in formulation, does not have a patent issue so I am only guess what are the reasons. Eli Lilly should be ashamed.

10:34 am February 21, 2008

dr. adhd wrote :

There's a good explanation for the Adderall XR price increase by Shire.
Initially priced very similar, they raised the price of Adderall XR so that their newer product, Vyvanse, is now cheaper by comparison. At the same time, they have stopped giving managed care plans rebates (discounts) on Adderall. All in an effort to get as many Adderall patients switched to Vyvanse as possible, before Adderall goes generic in the near future.